Infinity Investment Group Holdings Ltd v Queenstown Lakes District Council

• Jurisdiction: New Zealand
• Court: Environment Court
• Judge: R G Whiting sitting
• Judgment Date: 28 April 2010
• Neutral Citation: [2010] NZEnvC 234
• Docket Number: ENV-2009-CHC-46
• Date: 28 April 2010

In the Matter of the Resource Management Act 1991

In the Matter of Appeals Under Clause 14 of the First Schedule to the Act

Between

Infinity Investment Group Holdings Limited

Willowridge Developments Limited

Orchard Road Holdings Limited

(Env-2009-Chc-46)

and

Remarkables Park Limited

(ENV-2009-CHC-48)

Five Mile. Holdings Limited (In Receivership)

(Env-2009-Chc-50)

Appellants

Queenstown Lakes District Council

Respondent

Decision No. [2010] NZEnvC 234

court:

Environment Judge R G Whiting sitting alone under s 279 of the Act

ENV-2009-CHC-46

BEFORE THE ENVIRONMENT COURT

Affordable housing — whether plan change requiring developers to make provision for affordable scope within the scope of the Resource Management Act 1991 (“RMA”) — whether plan change was prohibited by s74(3) (must not have regard to trade competition) — whether Affordable Housing Enabling Territorial Authorities Act 2008 precluded matter from being dealt with under RMA — whether rules of plan change related to a resource management purpose — whether it was a plan change, a license, a subsidy or a tax.

Appearances:

Mr C N Whata and Ms J R Kirby-Brown for Infinity Investment Group Holdings Limited, WillowriClge Developments Limited and Orchard Road Holdings Limited

Mr J D Young for Remarkables Park Limited

Mr W P Goldsmith for Five Mile Holdings Limited (in receivership)

Mr M A Ray and Mr GM Todd for Queenstown Lakes District Council

DECISION OF THE COURT ON PRELIMINARY QUESTIONS OF LAW

• A. Plan Change 24 falls within the scope of the RMA.

• B. Plan Change 24 does not come within the prohibition of section 74(3).

• C. The Affordable Housing: Enabling Territorial Authorities Act 2008 does not prevent affordable housing from being addressed under the RMA.

• D. The proposed rules relate to a resource management purpose.

• E. Whether PC 24 is a licence, and/or a subsidy, and/or a tax is a question of fact, which may be determined at the substantive hearing.

REASONS

Introduction

1 Plan Change 24 — Affordable Housing is a proposal by the Council to address its concerns about the effects that a shortage of affordable housing is having on the welfare of the community. Plan Change 24 is the mechanism Council has chosen to introduce affordable housing into the policies of the District Plan so that it can become a relevant matter when plan changes are proposed as well as when resource consent applications are considered. 1

2 There are three extant appeals. The appellants have raised numerous issues in their notices of appeal. However, counsel for the respondent in a memorandum dated 27 July 2009 considered that these could be reduced to four general issues that would need to be considered by the Court, namely:

• 1. Whether affordable housing is a matter that can be addressed in the context of the Resource Management Act 1991;

• 2. Whether or not there is an affordable housing shortage in the district;

• 3. Whether or not intervention using the planning process is appropriate;

• 4. Whether the mechanisms included in Plan Change 24 are an appropriate response to the problem.

3 Counsel for Infinity, by memorandum dated 28 October 2009 sought leave for the consideration of two preliminary questions of law:

• 1. Is QLDC empowered by the RMA to require new development to subsidise affordable housing by the imposition of financial contributions under amendments 3 to 9 of Proposed Plan Change 24?

• 2. Is QLDC prohibited by s 74(3) of the RMA from requiring new development to subsidise affordable housing in order to mitigate an effect of competition for land under amendments

• 3. to 9 of Proposed Plan Change 24?

4 Counsel for Remarkables Park, by memorandum dated 4 November 2009 sought leave for the Court to determine the following question of law:

1. Does the RMA empower the Council to direct that developers provide or subsidise affordable housing?

5 This question of law is similar to that advanced by counsel for Infinity, but raises a broader question as to the purpose of the RMA and the council's role under the RMA.

6 By a procedural decision dated 16 November 2009, Judge Jackson granted leave for the preliminary questions of law to be heard by way of interlocutory proceedings. These were heard in Queenstown on 28 April 2010.

Plan Change 24

7 Counsel for the respondent summarised how Plan Change 24 would work, as follows: 2

• [ 16] PC 24 proposes to introduce two objectives in section 4.9 (District-wide Issues), namely:

  Objective 1 — Access to Affordable and Community Housing:

  To provide a range of opportunities for low and moderate income Resident Households and Temporary Worker Households to live in the district in accommodation appropriate for their needs.

  Objective 2 — Quality of Affordable and Community Housing:

  To ensure the provision of high quality Affordable and Community Housing in proximity to places of work, transport and community services.

• [17] These objectives are supported by the following policies:

  Objective 1 policies:

  • 1.1 To assess the impact of the development and/or subdivision on the supply of and demand for Affordable and Community Housing, and whether a contribution towards Affordable and Community Housing is necessary to mitigate any adverse effects and/or impact of the development and/or subdivision.

  • 1.2 To ensure that the Affordable Housing demand generated by the development and/or subdivision is met.

    Objective 2 policies:

  • 2.1 To ensure that Affordable and Community Housing is located within the urban settlements of the district.

  • 2.2. To ensure that Affordable and Community Housing is well designed and energy efficient.

  • 2.3 To avoid the concentration of Affordable and Community Housing with provisions for its spread throughout a development and the urban settlements of the district.

• [18] The primary method introduced by PC 24 is the requirement for an Affordable and Community Housing Assessment to be completed as part of any future plan changes and in certain resource consent applications. This assessment process utilises the ‘linkage zoning approach’ — that is, the focus of assessment is on the likely employment to be generated by the development, the income profile of those employees, and as a result, the demand for Affordable Housing generated as a result of that development.

• [19] ‘Affordable Housing’:

  Means housing whose cost to rent or own does not exceed thirty percent of the gross income of lower and moderate income households and which reflects the design criteria established in Appendix 11.

  ‘Community Housing’:

  Means affordable housing that maintains long term affordability for existing and future generations through the use of a Retention Mechanism.

  ‘Retention Mechanism’:

  Means those tools which ensure the long term affordability of Community Housing for existing and future generations. Will normally involve the transfer of ownership to the Council or the use of covenants, encumbrances or similar restrictions.

  ‘Community Housing’ is that component of ‘Affordable Housing’ which has the retention mechanism designed to ensure that it remains available for use by low/moderate income families. A ‘retention mechanism’ is defined in Plan Change 24 and Council expects that this will require either the transfer of land or money to an appropriate entity (such as a Housing Trust) or that similar arrangements are made to secure long term affordability (typically involving the imposition of covenants or consent notices).

• [20] Appendix 11 to the Plan Change sets out the process by which the assessment of Affordable and Community Housing demand is to be completed. Two routes are offered: one involves the application of pre-set demand figures, the other by specific analysis.

• [21] This assessment then leads to the identification of the quantum of Affordable and Community Housing which should be provided. Affordable Housing is taken to mean housing which should be able to be rented/ purchased at an affordable level by low to moderate income households, but does not need to be subject to a specific retention mechanism (and thus [initial and] future rental levels/prices are determined by the market place). Community Housing means housing that is subject to a retention mechanism which will ensure that the housing will remain affordable to future purchasers/renters. Appendix 11 states that Community Housing should represent forty percent of the total Affordable Housing/Community Housing demand.

• [22] Appendix 11 (Section 2, Part 13, Step 3) suggests how Affordable Housing may be provided:

  ‘this may include (but is not limited to) the use of duplexes, townhouses, residential flats and apartments’.

• [23] In practical terms this means that the developer at the time a plan change request is submitted or an application for a resource consent (non-complying or in some cases discretionary) is made will include in the plan or application, provision for the applicable Affordable Housing component. This may require the appropriate number of allotments to be set aside for multi-unit or duplex development. In other words there would be a requirement to incorporate allotments which encourage a form of housing that by its nature is more likely to be affordable to lower and moderate income families. Appendix 11 indicates that up to sixty percent of the Affordable and Community Housing component may be sold by the developer in the normal way.

• [24] Appendix 11 indicates that at least forty percent of the Affordable Housing component is to be set aside for Community Housing. This component is the only direct contribution required. It can be satisfied by either the setting aside of land for that purpose, by making a payment equal to the value of the land concerned, or by actually providing the housing. The Community Housing component can be either managed by an appropriate trust or by the developer however, it must be retained for...